From the FREQ 10-K filed in March:
Under our agreement with Astellas, Astellas is responsible for the development and commercialization of FX-322 outside of the United States. As consideration for the licensed rights under the Astellas Agreement, Astellas paid us an upfront payment of $80.0 million in July 2019 and has agreed to pay potential development milestone payments of up to $230.0 million. Specifically, we would receive development milestone payments of $65.0 million and $25.0 million upon the first dosing of a patient in a Phase 2b clinical trial for SNHL in Europe and Asia, respectively, and $100.0 million and $40.0 million upon the first dosing of a patient in a Phase 3 clinical trial for SNHL in Europe and Asia, respectively. If the Astellas licensed products are successfully commercialized, we would be eligible for up to $315.0 million in potential commercial milestone payments plus tiered royalties on any future product sales ranging from low- to mid-teen percentages.
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Astellas is paying Frequency for jointly meeting each development milestone outside of the US. The agreement is clearly structured to gain the ultimate benefit at the commercial milestone. There's not clear contractual wording in the 10-K that FX-322 cannot "skip" a trial.
The key word I am seeing here is "milestone" I am not a lawyer; but if FX-322 goes from Phase 2A -> Phase 3, they technically achieved the 2B milestone by skipping it; and would receive the benefit.
In my opinion, the way it is structured, the emphasis is to get to that commercial milestone + royalties.
Also, there's no mention that US development and International development could be asynchronous. I don't know if this is possible; where FREQ starts a US Phase 3, while Astellas is conducting a 2B in a EU/Asia country.